‘IMF FACILITY BEST PRESCRIPTION FOR ZAMBIA’

THE Extended Credit Facility (ECF) from the International Monetary Fund (IMF) is the best prescription for Zambia in the immediate term as it will assist in clawing back investor confidence.

This will however need to be complemented by aggressively executing the Economic Recovery Plan (ERP), says Economics Association of Zambia (EAZ) National Secretary, Mutisunge Zulu.

Mr Zulu stressed that to allay fears of those thinking the ECF was a loan that Zambia would pay for the rest of its life, the facility was the best prescription for the country in the immediate term.

“The package is not for debt service neither will it effectively solve our economic woes but the most tangible externality of bailout by the lender is investor confidence (to claw back) which has dwindled after the elevated fiscal fragilities to include the three- coupon payment defaults on Eurobonds outstanding.

“The fundamentals are clearly in favour of Zambia from a commodity price perspective i.e. copper on the London Metal Exchange is racing north of US$9, 125 per tonne supported by strong Chinese and United States growth recovery amidst a greenfield driven electric car era and other infrastructure pushes globally,” he said in an interview.

The Zambian Government was currently in talks with the Washington based lender- the IMF, for an ECF.

Mr Zulu however said this would require aggressive execution of Zambia’s ERP especially to drive private sector led growth to help the nation improve its export earning capacity, as the country strides to restore fiscal fitness.

He indicated that there was a strong manufacturing opportunity call for Zambia that had been underestimated for years.

Mr Zulu added that it was high time Government became deliberate about reorganising production policies as well as financial institutions including the regulator the Bank of Zambia to address the cost of capital perpetual hurdles.